Question

Primary and secondary markets

Options

• Compete with each other

• Complement each other

• Function independently

• Control each other

Answer 1

Complement each other

Explanation - 

The primary and secondary markets are complementary. The primary market is where new securities are issued. That is, a corporation raises financing directly from borrowers through the primary market. The secondary market, on the other hand, deals with the acquisition and sale of existing securities. That is, securities are traded in the secondary market after they are issued in the primary market. Both markets are complementary in this manner.